India budget to have limited impact on petchems - sources

07 July 2009 12:20[Source: ICIS news]

By Prema Viswanathan and Salmon Aidan Lee

SINGAPORE (ICIS news)--The additional excise duties imposed on some petrochemical products in India's 2009-2010 budget will not have a huge impact on producers' margins, market players said on Tuesday.

Importers of purified terephthalic acid (PTA) said the doubling of excise duty on fibre intermediates to 8% would likely add to their costs but they could transfer them to the next segment of the chain.

"We’re export-oriented, so most duties and taxes would eventually be returned to us in the form of rebates," said a source from South Asian Petrochemical (SAP), a producer of bottle-grade polyethylene terephthalate (PET) in Haldia, on the east coast of India.

"And even if there are no rebates, we’d transfer to the next segment of the chain and we need not bear [the costs]," added the SAP source.